Using Product Loyalty Programs to Help Teach Saving Skills

As a child, I went grocery shopping with my adult sister at a store that didn’t exist in my hometown. When she checked out, the cashier gave her a number of stamps based on how much she had spent, and she discovered that she had enough saved to treat me to a toy chosen from the store’s stamp redemption counter. Even though I hadn’t seen her save the stamps over several trips, I remember the thrill of seeing how saving up that pile of stamps paid off! It was an early lesson in saving for me and one I didn’t forget.

Buyer loyalty programs have changed quite a bit over the past several decades; instead of giving customers stamps they can collect and exchange for merchandise, grocery stores generally offer discounts or free turkeys at Thanksgiving in exchange for purchases of a certain dollar amount, and everything is tracked electronically. Two drawbacks to this method (from the buyers’ perspective) are that children can’t store stamps in a box, and points can’t be given to friends.

While nearly all store loyalty programs have switched to electronic tracking, many manufacturers still have programs that use physical tokens of some sort on their packaging (UPCs, codes to enter online, or small cut-out logos) to encourage brand loyalty among customers. When you already buy a product regularly, it’s nice even for adults to get some bonus freebies now and then by saving these tokens. If you have kids, it’s also a great opportunity to teach them about saving. They can choose a prize they like and help clip UPCs or logos, counting how many they still need to “earn” the prize.

The list of companies offering loyalty programs of this type changes frequently. Some programs — such as Betty Crocker points — last for generations, but others are only around for a few weeks or months (no longer than a coupon or rebate promotion and barely long enough to save for a good reward). For this reason, if you see an incentive you like on a product you would probably buy anyway, it might be worthwhile to stock up right away. I recently spotted an offer for a long-sleeved t-shirt on a Pop Tarts box. The cost of the four or five boxes of Pop Tarts I needed to get it would have been less than the cost of the t-shirt, so I bought them all right away. Had I not stocked up, I would have Pop Tarts but no t-shirt because the next time I was in the store, those “specially marked boxes” were no longer there. If you do buy more than you usually would, be sure the price is right, and explain to your children how buying multiple products you regularly use at a bargain price can help you save in the long run.

In addition to varying durations, each incentive program differs in offerings and rules, so be sure to read the fine print. Some programs, such as Hershey’s short-lived 2007 Wrapper Cash promotion, require you to bid on items, using wrappers or tokens from packaging as money. These promotions cash in on the popularity of eBay and other online auction sites, but I would much prefer knowing how much each reward costs so I can teach my children how to make a saving goal.

To get started, here are some national brand loyalty programs, on whose products you can look for tokens you and your family can save for prizes:

My Coke Rewards: Coca-Cola’s promoters describe this program as having “prizes for every interest.” Quite a claim, as I have several interests for which I can find no rewards (reading, puzzles, crafts, etc.). However, they do have a pretty big selection of entertainment and sports rewards, as well as my favorites Coca-Cola products. I save up for coupons for free 12-packs, which cost 100 points. (Each 12-pack has a ten-point code, so it’s like getting 10% of my Coke products for free.)

Pepsi: Up until recently, Pepsi had a program where you could redeem codes for sweepstakes entries. It gets customers to the website, but doesn’t really offer much incentive to buy more Pepsi and save up. However, the Pepsi Stuff program for which I found a code on a new 12-pack seems a bit more promising. Launching February 1, 2008, the teaser site suggests prizes you can save for, including music and television downloads, in addition to the sweepstakes entries.

Pampers Gifts to Grow: Pampers diapers and wipes have codes that can be redeemed for infant and preschool toys made by Lego and other well-known brands, featuring characters from Sesame Street, Dora the Explorer, and more. The rewards require shipping and handling, the cost of which the site does not reveal until you’re ready to redeem the codes for the reward. I earned a Bob the Builder Duplo set for my son, paying $8.00 to have it shipped. The shipping cost was well below the cost of the set at Toys R Us ($35.00), but considering how little he has played with it, that $8.00 might have been better off in his savings account.

Purina weight circles: Like Pampers points, Purina’s weight circles (found on pet food products) offer rewards tailored specifically for those who generally buy the products. These circles can earn checks toward future Purina purchases or veterinary services, merchandise with Purina logos, and gift certificates to restaurants and other businesses that cater to humans.

Kool Aid points: When I visited the website for this promotion, I couldn’t find any mention of an expiration date or program end date, but no products were available in the redemption catalog. Unfortunately, this experience illustrates the “here today, gone tomorrow” nature of many of these incentive programs, which the manufacturers use to create a sense of urgency. I wonder how much ill will this practice creates among those who have been saving up for a prize only to find it unexpectedly unavailable when they are ready to order it.

Disney Movie Rewards: This program offers Disney merchandise and movie tickets in exchange for codes from Disney DVDs and theater ticket stubs. Promoted in the nepotistic Disney fashion, this program (which runs through January 2009) has become quite popular among families with children.

Kellogg’s movies: Cereal companies are well known for offering small prizes that kids can save up for, some for cash plus UPCs and some for UPCs alone. Recently, Kellogg’s had a relatively long-running program, during which its boxes featured forms and coupons that offered a free DVD for five purchases. The movies were full-length, mostly well-known titles. The boxes have disappeared from our local stores’ shelves, but I still have a certificate that’s good until March 31, so there may be more out there.

Cigarettes and Alcohol: I’m not a smoker, and I rarely drink, but I have heard that several brands of cigarettes (including Newports and Virginia Slims) and alcohol offer rewards for proofs of purchase. Understandably, I could find nothing official on these programs online — they are advertised directly to the companies’ customers to minimize criticism for rewarding unhealthy behavior. I would also recommend avoiding these brands’ loyalty programs as a teaching tool for children — use products they can enjoy instead.

Upper Deck trading cards: Specifically geared toward kids, each Upper Deck trading card (at least the 2006 cards, according to the website) have codes that are worth a specific value that remains secret until the code is entered online. Prizes include music downloads, movie passes, video games, and sports memorabilia. Those who have duplicate cards can trade them through the site to get more points.

Betty Crocker Points: Betty Crocker points were still around through 2006, appearing next to the Box Tops for Education logo on General Mills products. The Box Top for Education is worth a dime to a school, but near the end of the program, the Betty Crocker points were nearly worthless, as you could only earn a discount on a purchase, not a free item. Plus, most of the items in the catalog were sold elsewhere for nearly the same price as the discounted price you had to save up for. If you still have Betty Crocker points you want to use, click on “Points” in small print at the bottom of the company’s website, where you will learn how to redeem them for a 10% discount at the company’s online store.

Dum Dum Lollipops: Dum Dums’ Save Wraps for Stuff is similar to the Betty Crocker program in that you still have to lay out cash in addition to the saved wrappers to get anything. The rewards are fun, retro-looking products with the Dum Dum logo on them, which you might consider buying for a tween, but it’s better to view the redemption as a purchase rather than as a reward.

If a particular loyalty program offers rewards you don’t really want, you can still benefit from saving the points. Have some you won’t use? Read the fine print, and if it’s allowed, sell them on eBay. After I received the Bob the Builder set from Pampers, I continued to save Pampers points, and every two months or so, I sell the codes in a lot, earning anywhere from $10 to $30 for them. If your children are the ones saving the tokens/points, get them involved in the auction process by having them calculate shipping, help you write the description, track the bids, and package the tokens.

Likewise, if you really want something but are just a few points/tokens too short, look into buying some more on eBay. Also consider asking friends and relatives to save their codes/tokens/points for you if they aren’t already saving them for themselves. Most people will gladly help you save for something when they’d just throw away the packaging, anyway. If others are saving tokens for your children, be sure your children write thank you notes, including a mention of what prize(s) they earned.

Don’t lose your good money sense, however, when you (or your child) set out to save for a reward. You may actually be able to buy the reward you want in a store for less than what you spend acquiring points/tokens (either by purchasing them outright or by buying products you wouldn’t normally buy). Reinforce the lesson you want to teach your children by saving and spending wisely, even if it’s not real cash.

Instead of buying crap with points, why not teach your kids to save by letting them know that these are just ploys to get more of their money and they should ignore the marketing and use products that they need.

There are also organizing programs online where you can show your tech-savvy child how to manage rewards and spending online. Leveragecard.com has an interface very similar to online banking and that can be an added feature in your savings lesson.

Loyalty programs are excellent educational programs (I really never thought of in that way). They teach consumers how to be savvy in their accumulation of the reward currency and how to save for that item you want. Granted many programs are ill-conceived – but funny enough, the consumer can figure those programs out. Well constructed loyalty programs do force consumers to make some very considered choices